At what figure do YOU think the average house price will hit rock bottom ?

bluey890

Graham_Devon wrote: »

But many many MANY more are purchased by working people.

A very small handful are BTL, and the money given by parents has absolutely no backup. The whole money given by parents is a farce anyway. They would have to get round tax to do that. You cannot just gift someone 150k for a house.
.

To the contrary. There's the seven year rule with gifts.

Graham_Devon

bluey890 wrote: »

To the contrary. There's the seven year rule with gifts.

Yes, there is.

But I think were getting a little off track now. I don't believe what you are saying is the trend for most people in all honesty.

Plus, I don't believe (and this is my personal opinion) that we should have to be relying on our parents to buy us houses....surely that itself says they are wayyyyy to expensive.

bluey890

lostinrates wrote: »

What sort of loan can you get for BTL? how do lenders work out what is a viable/safe loan? (not a leading question, but an interest in how it is now and if its changed since crash). I'm interested how it copares to other types of business lending as well as potential impact on domestic market

30% minimum deposit usually. So long as many lenders have some equity to hold onto should equity fail, they don't mind some risk (although repayments of less than 80% of rental income is usually required).

bluey890

Graham_Devon wrote: »

Yes, there is.

But I think were getting a little off track now. I don't believe what you are saying is the trend for most people in all honesty.

Plus, I don't believe (and this is my personal opinion) that we should have to be relying on our parents to buy us houses....surely that itself says they are wayyyyy to expensive.

What should be happening and what is happening is sadly very different. The resource known as property is in increasingly short supply. I see a future where there's the haves (BTL landlords) and the have nots (people trying to buy a home to live in).

mewbie_2

bluey890 wrote: »

I see a future where there's the haves (BTL landlords) and the have nots (people trying to buy a home to live in).

No. You see the past ten years. It's all over now. Game's up for that particular racket.

mitchaa

Graham_Devon wrote: »

Household income is just that, the amount coming into the household regardless of who lives in it.

However, £32,779 is the average income for households with families in it (proof below) which was from 2006. However, this is sourced from the ONS, so I believe this is the mean figure, not the median which Iveseen puts at 45k, 13k over the amount in 2006, and it hasn't shot up 13k since then, as we have had inflation vs wage rise arguments for thepast 2 years.

http://news.bbc.co.uk/1/hi/uk/7071611.stm

£32,779 as of 2005/06

We have had 06/07, 07/08, 08/09 and now in 09/10 so 4yrs later. Given inflation that figure alone would be reading £36.5k today.

What these figures take into account though are the benefit classes, i.e average household, not average working household.

Look at the 2008 government data of 30m jobs analysed. This is only 6 months old and tells you what everyone, everywhere is earning. You can play with the FT/PT, male, female mean, median etc.

To me a true average would be 2 x £26k earners, although i can i go 1 step further and say i should take MR FT average and MRS FT average as the £26k figure takes into account PT workers.

If you are happy looking at median male FT and median female PT to get your figure, that way you could argue that this is a fairer representation but to bring the workshy benefit brigade into your figures to justify that the figures are a lot lower is not a true representation when discussing housing market affordability.

I do believe the average working family will have an income ITRO of £2500pm which is around £40-41k pre tax. No im not delusional, just the figures speak for themselves, even looking at the medians (50% below 50% above)

Graham_Devon

The ONS chart, the one on Statistics covers benefits, its why it has a dark blue and light blue column.

If you believe the average working family has an income of 40-41k can you please back this up with facts? There are plenty of websites detailing averages wages.

Also, the top graph is 2006/7.

To me, at least, if we are going to say "2 people should be needed to buy a house", you cannot then rely on statistics based on the average wage of a male and female.

You need to look at household income. It is FAR easier for someone without a family to get a higher wage, FAR easier for them to both work full time etc, FAR easier for them to get jobs starting at 8, finishing at 6.

It is totally unfair to in one sentence say 2 people should be needed to buy a house, and then use figures which include professional singles to back up your idea of the high average house prices should be at.

Kev09

Thrugelmir wrote: »

Enlighten me as to an alternative basis of approximate valuation. While not precisely accurate its a good measure of affordability and therefore prices.

3.5 x income is joke for house price valuations! two things influence prices, supply and demand! Now demand is influenced by the availabilty of credit which is where incomes come in, but lots of other factors influence this too like property programmes hyping up the market or the fundemental shift in viewpoint that it is essential now to be a worthwhile human being you have to own your own home.

A better way than 3.5x income to value a house would be adding up all the little bricks, all the wood etc and calculating how much it would cost the average brickies to build it and trust me this is a sh*t valuation method.

Incomes and house prices need not have any direct relationship at all to each other!!

Graham_Devon

Also, worth looking at whats actually happening to average incomes...



The chart shows pay growth, and it's heading downwards, which means our income is in relative terms, going down too.

Graham_Devon

Kev09 wrote: »

3.5 x income is joke for house price valuations! two things influence prices, supply and demand! Now demand is influenced by the availabilty of credit which is where incomes come in, but lots of other factors influence this too like property programmes hyping up the market or the fundemental shift in viewpoint that it is essential now to be a worthwhile human being you have to own your own home.

A better way than 3.5x income to value a house would be adding up all the little bricks, all the wood etc and calculating how much it would cost the average brickies to build it and trust me this is a sh*t valuation method.

Incomes and house need not have any relation at all to each other!!

Were talking affordability, not valuations.

Property programmes do not influence you buying if you do not have the funds or the means to buy. That made me laugh

Top gear influences me to buy a high end 80k sports car, don't mean I can!

Also, can you please explain how incomes and prices have no relation to each other. I simply cannot get my head around it, yet people keep saying it. So far people have just said people are earning far more than they actually are!